Lenovo transformation: Betting tablet to break through smart devices

November 7 Lenovo released the latest earnings show its PC business growth hit the ceiling, to seek another point of growth has no delay. Just a few days before the earnings release, the main actor in Lenovo's most important press conference this year was not a mobile phone, nor a television, but accidentally spent tablet computers.

At the press conference, Lenovo's top brass emphasized that the tablet computer will play Turing role in the breakthrough of Lenovo transformation: because of its stronger relationship with the original main PC business, and the market competition pattern still has the opportunity. The move means that Lenovo's ambition to continue to PC into the Yoga tablet is further, and the clarion call for the tablet computer market, which is represented by Apple, has been officially sounded. Samsung, on the other hand, has also launched a challenge to Apple's tablet, which is due to the decline in ipad market share. This shows that the market is not a foregone conclusion of the market, for all participants are opportunities.

PC gain against mobile device

Lenovo's second-quarter report (as of September 30, 2013) showed that the quarter's turnover amounted to $9.8 billion, an increase of 13% per cent, and an increase of 30% per cent, up to $265 million trillion, from a year earlier, with profits rising 36% per cent to $220 million. In the quarter, Lenovo sold 29 million devices (PCs, tablets and mobile phones) worldwide, creating a record high.

As you can see, despite the challenges of the PC business environment, in the second quarter, Lenovo's notebook computers to the group's global turnover contribution to the proportion is still the largest, accounting for 51% of total turnover, up to 5 billion U.S. dollars, an increase of 8%.

In the quarter, Lenovo, the world's largest computer maker with a 17.7% per cent market share, continued to pull up the gap with other rivals, with the combined turnover of Lenovo desktop PCs down 3% to 2.7 billion U.S. dollars, accounting for 28% of the group's total turnover. In the first quarter, Lenovo's global market share of 16.7%, the first to obtain the world's first PC market.

The outstanding performance is the mobile interconnection and digital home (MID H) products, including smartphones and tablets of the combined turnover of 106% year-on-year growth of 1.5 billion U.S. dollars, accounting for the group's quarterly turnover of 15%. In China, Lenovo smartphone sales rose 64%, the second-largest Chinese expert machine manufacturer. At the same time, Lenovo's global Tablet PC sales hit a record high to 2.3 million, an increase of 4.2 times times year-on-year.

Combined, Lenovo's PC and Tablet PCs are now the world's second-largest, and the world's third-biggest smartphone maker, including smartphones, tablets and personal computers, has seen sales rise 36% per cent year-on-year.

It's not hard to see from earnings reports that mobile phones and tablet businesses have become the main drivers of Lenovo's growth. While global sales of Lenovo desktop PCs rose in the quarter, up only 1% per cent year-on-year, thanks to the contribution of Lenovo's commercial Thinkpadyoga. Looking at the PC industry, overall industry sales fell 6% in the reporting period, while notebook sales fell 12% year-on-year. There is no doubt that the global PC market is experiencing an unsustainable downward wave.

More notably, the company's smartphone and tablet total sales exceeded the group's total PC sales for two consecutive quarters, after Lenovo's first two consecutive quarters of PC success. In smartphones, Lenovo continued to be the world's fourth-largest smartphone supplier, with sales rising by 78% per cent year-on-year, with Lenovo hitting a record high on tablet computers in the global quarter.

That has been reflected since last year, when Lenovo's PC sales rose 10.2% per cent year-on-year in the Lenovo 2012~2013 fiscal year, while the overall industry recorded a 8.1% decline in the same period. Over the same period, Midh revenue grew 105% per cent year-on-year, accounting for nearly all of the group's overall revenue. Lenovo's smartphone sales in the Chinese market rose 3.6 times times year-on-year compared with the 2011~2012 fiscal year, the second-largest since last June and the global expansion program.

In this context, Lenovo looks for a

A new "main business" to achieve its ambitious PC strategy has become imminent. It is in this logic that, at Lenovo's most important event of the year, the biggest protagonist is not a mobile phone, nor television, but a tablet computer.

On the same day, Lenovo released the world's first multi-mode tablet computer yoga, and adopted a new rotary design, and the larger battery in the reel, it is the industry's most mature notebook battery, is Lenovo's core advantage.

From the appearance of the tablet computer, Lenovo wants to make the tablet into a deformable body of the PC, which has the dual properties of traditional tablets and notebooks, entertainment and work. "I think tablets are like netbooks from a few years ago," said Mr Yang, chairman and CEO of Lenovo Group. "At the same time, he revealed Lenovo's ambitions for the PC strategy--" the next goal is to gain a global lead in a ' big pc ' area like the PC tablet, and the next step is to make significant growth and breakthroughs in all smart devices (SCD). ”

Tablet breakout faces challenges

In the media communication after the report, Yang again stressed that Lenovo can achieve today's achievements thanks to the PC transformation of the thorough and resolute. And the future of tablets will be part of the "Big PC" concept and a big, important part. "We are optimistic about future market developments, driven by a wave of corporate change and a rebound in the Chinese market, the PC market will gradually recover, and the shift of Tablet PCs to the mainstream market and emerging markets will continue." These are the areas that Lenovo excels in, and we are confident that we can seize the opportunities and maintain strong growth. "said Yang.

The latest Digital Index report, released by Adobe, points out that smartphone shipments have surpassed smartphones worldwide for the first time since smartphones are now far larger than tablets. Adobe found that when internet users use a tablet, the average number of pages visited on the internet is more 70%--than when using a smartphone, which means that the tablet is more "deep". It is clear that tablets have gone beyond smartphones in both flow and depth applications.

According to IDC statistics, the second quarter of this year, tablet computer shipments ranked top five manufacturers are Apple, Samsung, Asus, Lenovo, Acer. The daily economic news reporter notes that the five companies share a common feature: they all have the background of the traditional PC industry, and so far they have their own PC business. In other words, no one in the tablet market is a pure cell phone or tablet manufacturer.

In an interview with the Daily Economic news reporter, Sun Yongjie, a senior it critic, said that, because of the similarity between the form and function of the tablet and the traditional PC, the traditional PC makers were more handy than the pure handset manufacturers in the management, operation and control of the industrial chain (compared with the smartphone industry), Especially in the tablet computer market to the PC industry mature and fight scale, the advantages of traditional PC manufacturers began to appear.

"In fact, the tablet is closer to the PC and we think it will be part of the PC in the future," Yang said at the press conference that day. There are several forms of PC in the future, such as flip-type laptops and yoga. Use is not the same, the traditional PC including the variable PC is a creative tool, tablet is a information browsing or information consumption tools, the future of intelligent more applications in browsing, life and work. ”

The industry is widely believed that in Samsung and Apple two oligopoly high-end smartphone market, some developed country market is showing signs of saturation, Apple's iphone sales also appears to be weak. The industry believes that future smartphone growth opportunities, from low-end or even cheap handsets, mainly in China, India-dominated Asia, Africa and other emerging smart phone market, and as the smartphone market competition, the low-end mobile phone market is difficult to make profits.

Meanwhile, he points out that tablets can share channels and sales patterns with PCs, so Lenovo is more likely to be profitable and more likely to grow. This is also why the tablet as a breakthrough focus.

Sun, deputy general manager of Connaught, said that, from the financial results, in the "PC tablet" market, Lenovo is currently sitting on the two to look at the apple, with a yoga plate such a shape has a great breakthrough in innovative products after the share of the potential to continue to climb. But within Lenovo Group, the company is not satisfied with the results, because in the volume of shipments, Lenovo Flat with the first, second Apple, Samsung shipments are too big.

Yang pointed out that the hope that through the launch and operation of new products will soon enter the world's top three, and the top two (Apple and Samsung) to launch a challenge.

It is noteworthy that recently, Samsung also said, to replicate the smartphone experience, on the tablet to win the Apple. Samsung's tablet computing business is booming, and the company will become the world's largest tablet maker, Shenzong, head of it and mobile business. In the third quarter, Samsung's share of the tablet market rose to 20%, while Apple's market share fell to 30%.

At present, Lenovo in the market share has been closely chasing Samsung, Apple, but to enter the mature European and American markets, we must upgrade high-end brand image. To this end, Yang said, "Yoga tablet is not only as a breakthrough in the field of tablet computer products, but also as the promotion of Lenovo brand image products." "He said that in the process of Lenovo to the more peak efforts, gradually in the market competitiveness, the future is not only the market share of the lead, but also in the innovation model and business model to become a leader.